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Level 1

How to include cost of goods sold when categorized as owner's investment?

I was running expenses through my personal account when I first started the business. Am I able to include an owner's investment expense to also a cost of goods sold so that my profit and loss report shows a true gross profit?

 

I am also wondering if I should relabel my category of Cost of Goods Sold if I only sell services (digital marketing and web design) and not physical goods.

 

Thank you!

1 Comment
Level 15

How to include cost of goods sold when categorized as owner's investment?

for taxes COGS deals with inventory purchased and sold

COS< cost of sales, is more to the point for a service oriented business IMO

 

Yes you can, if you were using COS as an example, journal entry

debit COS $$$
credit owner equity investment $$$

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